Reaction to Budget 2012: Part 2

Minister for Finance Michael Noonan TD today announced the rest of Budget 2012. The main points are as follows:

VAT: Raised by 2% to 23%

1.4c increase on Petrol

1.6c increase on Diesel

€17.32 increase on Fuel Oil (to rise in May)

€14.46 increase on Natural Gas (to rise in May)

No Carbon Tax on solid fuels

25c increase on pack of 20 Cigarettes

Capital Acquisitions Tax: Up from 25% to 30%

Capital Gains Tax: Up from 25% to 30%

DIRT: Up from 27% to 30%

Corporate Tax Rate: To remain at 12.5%

This side of budget seems a bit more balanced in comparison to yesterdays cuts. While the 2% rise in VAT will hit the price of everything (including Alcohol, Cigarettes and fuel) it is the only swinging tax announced.

The Household Charge being introduced ahead of a Property Tax can be paid in instalments, so that should lessen its impact. Also the rising of the threshold on the Universal Social Charge takes the low paid out of the Tax Net which is a good thing.

Some of the cuts yesterday still leave some bitter taste. But only time will tell if the right medicine is being given to Irish economy.